Risk Management Expertise: Insurance Underwriters

2015 has been a year of ups & downs for most of the world, but now it is nearing an end. As we approach December 31, and consequently the start of a new year, one thing that many people forget about or just avoid for the vast majority of the calendar year pops up once again: insurance. There may be some of our readers who view insurance as a necessary evil, something that nobody really ever wants, but we all need in case of disaster. Even more people see insurance companies as "black boxes" that take in all of their information & then spit out a rate quote that seemingly has nothing to do with any of the information that was provided besides being way too expensive. However, there are people working behind the scenes at these insurance companies, as well as at other businesses, to analyze the risks presented by the people & corporations applying for various forms of insurance & come up with an appropriate premium amount to cover the risk taken by the insurer. These professionals are called Insurance Underwriters.

Insurance Underwriters decide whether to provide insurance and under what terms. They evaluate insurance applications and determine coverage amounts and premiums. Underwriters analyze the risk factors on an application & must achieve a balance between risky and cautious decisions. If underwriters allow too much risk, the insurance company will pay out too many claims. But if they

don't approve enough applications, the company will not make enough money from premiums. Most insurance underwriters specialize in one of three broad fields: life, health, and property and casualty. Although job duties are similar, the criteria that underwriters use vary. For example, for someone seeking life insurance, underwriters consider age and financial history. For someone applying for car insurance (a form of property and casualty insurance), underwriters consider the person's driving record. Underwriting as a profession most likely got its start in the Age of Imperialism (1700s - 1800s), as banks like Lloyd's of London accepted risks related to long sea voyages in exchange for premiums. The financier who is accepting the risk would put together a contract & quite literally sign their name underneath the area specified for risk information. Hence, we now use the term "underwriting"!

If you want to learn more about the Insurance Underwriting profession, check out our infographic below, which details job duties, how to get into the field, salaries & benefits, as well as statistics on the professionals who comprise the underwriting occupation today. We will be posting insurance underwriting related content all week on our Facebook & Twitter pages, so be sure to stay tuned for more interesting & insightful information!

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